Kodak says Apple, FlashPoint want to “delay and derail” patent sale

Is Apple trying to make Kodak's bankruptcy proceeding as difficult as possible?

Kodak is accusing Apple and FlashPoint Technology of attempting to block Kodak's sale of its patent portfolio as part of its Chapter 11 bankruptcy proceedings. The photography giant has now filed a new lawsuit against the two companies, arguing that Apple and FlashPoint are deliberately taking advantage of Kodak's bankruptcy situation by attempting to "delay and derail Kodak's efforts" to sell its Digital Capture Portfolio by claiming that they own 10 of the claimed patents.

According to Kodak's complaint, filed in the US Bankruptcy Court for the Southern District of New York, Kodak and Apple worked together between 1992 and 1994 to develop "certain digital camera technology" under Apple's code names Adam, Aspen, and Phobos. In December of 1994, the companies entered an agreement regarding Aspen and Phobos that said each party retained ownership of its own intellectual property.

That same month, Kodak filed an application with the US Patent and Trademark Office (USPTO) for one of the main patents involved in the dispute (referred to as the "'218 patent") and subsequently filed applications for nine other digital imaging patents. All of the patents ended up being issued to Kodak between 1996 and 2010.

Kodak eventually decided to file an International Trade Commission (ITC) complaint against Apple and HTC in January of 2012. At that time, Kodak essentially argued that the way in which iOS devices—as well as a number of Android devices from HTC—allowed users to take, select, and send photos over the network infringed on Kodak's patents. Then, Apple started claiming that it, in fact, owned several of the patents Kodak was trying to assert, which was quickly followed by similar claims from FlashPoint. Kodak also points out that Apple brought the '218 patent into dispute for the first time in 2010 as part of a different ITC investigation.

Apple's position is that Kodak breached the 1994 contract between them, not to mention that Apple believes it owned the patents in the first place. FlashPoint claims it entered an agreement with Apple in 1996 that would then assign any rights that Apple might have owned to FlashPoint instead.

Indeed, the claims are complicated, and Kodak accuses Apple of being the "single largest infringer of patents in the Digital Capture Portfolio and also a potential purchaser of those patents." The company appears to believe that Apple is deliberately trying to cause a ruckus in Kodak's attempts to sell the patent portfolio, and it may even be abusing its "substantial cash position to delay as long as possible the payment of royalties to Kodak."

"Apple and FlashPoint are seeking to benefit from Kodak’s difficult financial position, which will be exacerbated if the Debtors cannot obtain fair value for the patents in the Digital Capture Portfolio," Kodak wrote in its complaint. "Any interference with the planned [patent portfolio] sale will cause obvious harm to the Debtors and all of their stakeholders."

Apple has not commented publicly on the new lawsuit, but Kodak is still holding out hope that it will auction the patents this coming August, according to Reuters. If that happens on schedule, the winning bidder will be announced on August 13. But if Apple has its way and continues to claim that it owns 10 of Kodak's patents, there's no telling when that date will come—if it ever does.

27 Reader Comments

Didn;t we just read that a court confirmed apple's ownership of the patents and said that Kodak could not dismiss apple's claims?

They said kodak could sell the patents, (which would involve selling only it;s share if apple was ruled to be the owner or part owner), and warned them the buyer might inherit apple's stake and cause future complications. That alone should derail any purchase. Would you buy something a court could later rule you onw less than half of, if not none of and watch controlling share return to some other company, while the company you bought it from is going through bankruptcy and may not be there to pay you back after the court case resolves?

Yea, apple is messing with that sale big time. because they OWN those patents, and have a long and complicated series of documents showing exactly how and when that was assinged. Can you really sue someone for defending their rights, especially AFTER a court already ruled they HAD that right? lol. Kodak wasting more money.

At this point Kodak is nothing but a patent zombie. I'd love to see Apple gut them on this one. Preferably without ending up in a position to go after HTC with the same patents, while I'm at the wishing well.

At this point Kodak is nothing but a patent zombie. I'd love to see Apple gut them on this one. Preferably without ending up in a position to go after HTC with the same patents, while I'm at the wishing well.

Pretty much what it all boils down to.

Seems to be like Righthaven, but with larger stakes. They are probably hoping some defendants would rather settle than pay for a legal defense.

It's really a shame that one of the former corporate icons of America is going out this way. Not any type of "Kodak Moment"...

The most important patent Kodak was attempting to wield was declared invalid, putting into question the worth of the rest of the 800 or so patents they are trying to sell. And yes, Apple was indeed declared the owner of a number of other patents in question.

I don't see why a judge should allow a sales of these patents, no matter what Kodak's situation may be, until the ownership issue is entirely straightened out. The judge has suggested that Kodak sell the patents, and hold the earnings of the patents Apple has been awarded, and the other disputed ones, in escrow.

But the problem here is the value of these patents for one thng. What if Apple wouldn't have accepted that price? And what if Apple didn't want to sell them at all? I'm not certain that the law allows one to control the sale of another's property.

At this point Kodak is nothing but a patent zombie. I'd love to see Apple gut them on this one. Preferably without ending up in a position to go after HTC with the same patents, while I'm at the wishing well.

Pretty much what it all boils down to.

Seems to be like Righthaven, but with larger stakes. They are probably hoping some defendants would rather settle than pay for a legal defense.

It's really a shame that one of the former corporate icons of America is going out this way. Not any type of "Kodak Moment"...

It's sad to me because I did a lot of work over the years with Kodak. My company was the only company in the world, and that includes Kodak themselves, who processed Kodachrome on a professional process with a machine we designed ourselves.

Yea, apple is messing with that sale big time. because they OWN those patents, and have a long and complicated series of documents showing exactly how and when that was assinged.

You act as if you have proof of any of this when you don't. The fact is we have two companies who have decided to use litigation instead of innovation (the new R&D standard for American companies) going after each other and it's time to pass the popcorn.

At this point Kodak is nothing but a patent zombie. I'd love to see Apple gut them on this one. Preferably without ending up in a position to go after HTC with the same patents, while I'm at the wishing well.

Pretty much what it all boils down to.

Seems to be like Righthaven, but with larger stakes. They are probably hoping some defendants would rather settle than pay for a legal defense.

It's really a shame that one of the former corporate icons of America is going out this way. Not any type of "Kodak Moment"...

Did you even read the story?

Whether or not the previous patent claims are valid or not, this is a story about Apple/Flashpoint attempting to derail the sale of Kodak patents they claim they own, not about Kodak being a patent troll..

Whether or not the previous patent claims are valid or not, this is a story about Apple/Flashpoint attempting to derail the sale of Kodak patents they claim they own, not about Kodak being a patent troll..

Did you even read the story?

the story wrote:

Kodak eventually decided to file an International Trade Commission (ITC) complaint against Apple and HTC in January of 2012. At that time, Kodak essentially argued that the way in which iOS devices—as well as a number of Android devices from HTC—allowed users to take, select, and send photos over the network infringed on Kodak's patents.

Yes, the article discusses Apple and Flashpoint's suits against Kodak, but I'm unaware of where in Ars' ToS it suggests that 'on-topic' means 'must mention everything touched upon in the article'.

Whether or not the previous patent claims are valid or not, this is a story about Apple/Flashpoint attempting to derail the sale of Kodak patents they claim they own, not about Kodak being a patent troll..

Did you even read the story?

the story wrote:

Kodak eventually decided to file an International Trade Commission (ITC) complaint against Apple and HTC in January of 2012. At that time, Kodak essentially argued that the way in which iOS devices—as well as a number of Android devices from HTC—allowed users to take, select, and send photos over the network infringed on Kodak's patents.

Yes, the article discusses Apple and Flashpoint's suits against Kodak, but I'm unaware of where in Ars' ToS it suggests that 'on-topic' means 'must mention everything touched upon in the article'.

And what is your point and how does this relate to Righthaven.

Kodak is clearly deeply entrenched in the photography world and and have countless patents and innovations in the sector. They are nothing like Righthaven whether you agree with the patent case against Apple or not.

The article is not about Kodak being aggressive with their patents, that was my point. It was about them trying to sell them and Apple/FlashPoint intervening, and as a result having filled suit against them for said intervention.

The previous case is merely a side story to be used as background support.

The fact is none of these cases have any relation to Righthaven .. which is why I asked whether or not you read the story. (i.e No, I am not suggesting everything has to be touched from the article, I am suggesting that the OP is drawing straws and his response has NO relation to the article.)

This is why the patent system is broken -- You can get granted patents for IP that you do not own.

Then contest it in court.

This system hurts everyone.

To be fair.. I don't think Apple is claiming that Kodak does not actually own the patents.. Apple merely claims that said patents were developed based on Apple technology that was disclosed during a period of Apple/Kodak collaboration. (and as such should be their property)

I'm pretty sure that puts them in hot water either way, as you can't knowingly file for a patent in which you clearly know that prior art exists (and while this is usually hard to prove, Kodak was literally collaborating with the company that claims to have invented said technology). i.e they probably don't have a foot to stand on if Apples claims are true

Yeah, I assumed karolus was referring to something like Intellectual Ventures but dredged up Righthaven from the same mental pit. If not then he's in the weeds, but I don't see the point in starting right in with a "did you even read the story" snark.

Quote:

The previous case is merely a side story to be used as background support.

The previous case is the only reason the current case happened; this is essentially a countersuit. Without the legal prodding from Kodak, Apple would never have known that Kodak was claiming to own something Apple thought was theirs.

Yeah, I assumed karolus was referring to something like Intellectual Ventures but dredged up Righthaven from the same mental pit. If not then he's in the weeds, but I don't see the point in starting right in with a "did you even read the story" snark.

Quote:

The previous case is merely a side story to be used as background support.

The previous case is the only reason the current case happened; this is essentially a countersuit. Without the legal prodding from Kodak, Apple would never have known that Kodak was claiming to own something Apple thought was theirs.

Sorry, I was not trying to be snarky.

I just sometimes get a little annoyed when I see comments that make it seem like the poster never read the article.

As for your last comment. Now that I think about it, I can't disagree. They are more closely related than I gave credit for.

Didn;t we just read that a court confirmed apple's ownership of the patents and said that Kodak could not dismiss apple's claims?

They said kodak could sell the patents, (which would involve selling only it;s share if apple was ruled to be the owner or part owner), and warned them the buyer might inherit apple's stake and cause future complications. That alone should derail any purchase. Would you buy something a court could later rule you onw less than half of, if not none of and watch controlling share return to some other company, while the company you bought it from is going through bankruptcy and may not be there to pay you back after the court case resolves?

Yea, apple is messing with that sale big time. because they OWN those patents, and have a long and complicated series of documents showing exactly how and when that was assinged. Can you really sue someone for defending their rights, especially AFTER a court already ruled they HAD that right? lol. Kodak wasting more money.

Why is is that the most accurate information isn't in the article? Not that this is a new problem, of course...

You act as if you have proof of any of this when you don't. The fact is we have two companies who have decided to use litigation instead of innovation (the new R&D standard for American companies) going after each other and it's time to pass the popcorn.

Why does this false dichotomy between litigation and innovation keep popping up?

The innovation is right there. Both Apple and Kodak did important work in digital photography. The litigation is them fighting over the ownership of that innovation. In this case, litigation is not some alternative to innovation, but rather a direct result of it.

Weaken your adversary until you can simply push them down or swallow them up. If anyone thinks Apple isn't as ruthless as the next company, I've got news for you.....

Alright, I'll bite.

Can either of you demonstrate how this particular battle demonstrates your point? Kodak wants to sell 1100 patents, 10 of which are encumbered by an ownership claim by Apple. Kodak could sever those 10 patents and sell the rest without issue, but instead it decides to sue Apple for maybe, possibly at some point in the future trying to stop Kodak from selling those 10 disputed patents. And yet, it's Apple that are being the dicks here?

Apple can be both ruthless and dickish, but I see no evidence of either of those traits in this story.